Cavalier treatment of agricultural sector

The recent assessment of the Philippine economy shows that despite the commendable 2016 GDP of 6.8 percent, the agricultural sector exhibited negative growth, falling by 1.1 percent from a 0.2-percent drop. The crop sector experienced a contraction in the fourth quarter, following a contraction in the preceding year. Even more problematic is the performance of the fishery subsector, which in the past seven years has been showing negative growth except in 2013.  To think that this subsector has a vast growth potential in a maritime country like ours!

Historically, the agriculture and fishery sector has performed poorly. And statistics show that poverty incidence has also been historically high in this sector, such that it needs serious attention if economic development is to be truly inclusive.  For example, according to the Philippine Statistics Authority, the highest incidences of poverty in 2012 were observed among fishers (39.2 percent), farmers (38.3 percent) and children (35.2 percent). In 2006 and 2009, these subsectors also registered the highest poverty incidence rates.

And yet, in the 2017 national budget, the Department of Agriculture’s share has been reduced to P45.3 billion from P48.9 billion in 2016. Although part of the DA’s needs are provided by other departments, it should have been given a much bigger budget for its own multifarious needs that need to be addressed posthaste.  In the budget deliberations, did the trickle-down advisers prevail over the bottom-up planners, with their focus on big-ticket projects in order to achieve a high aggregative GDP growth for propaganda purposes? Just asking.

In a recent interview, Agriculture Secretary Emmanuel Piñol pointed out that a major problem of farmers is selling their produce at higher prices due to the lack of farm-to-market roads (FMRs). (It is good to note that the Department of Public Works and Highways has an allotment for FMRs.) He observed that farmers are victimized by middlemen who are able to penetrate inaccessible rural areas with their sturdy vehicles and dictate the prices of produce.  In a noncompetitive milieu, conditions are developed where one or few buyers dictate the farm-gate prices.  And because of the multilayered distribution system, farm-gate prices are even depressed further.

Furthermore, in the midst of this market imperfection, an onerous social relationship develops which Sagrario Floro, in his in-depth study of agricultural credit relations, calls the “interlinked market system.” In this setup, the middleman—like the devil—entices the farmer to engage in money-lending, fertilizer, agro-chemical, machinery and other businesses, in the process perpetuating his perennial indebtedness. Often, this leads even to the farmer’s mortgaging his certificate of land ownership award—a state of affairs that defeats the government’s land reform program.

It has been observed that the insidious cartel system operates not only in rice production but also pervasively in the case of vegetables, fish, corn, coconut, tobacco and other rural products.  Together with government interventions, effective ways of combating this market dislocation along lines of community empowerment include the formation of various types of cooperatives, farmers’ associations, and NGOs.

But aside from these infrastructural and organizational strategies to solve the marketing problem, on the production side the DA still needs to provide subsidies for farm inputs, seeds, irrigation, mechanization and postharvest facilities, as well as assistance in modern farming methods, farm management, liberal loans, and other services. Thus, in order for the DA to implement directly these complex solutions to poverty alleviation and to avoid being always the whipping boy in the country’s economic development, its budget should have been increased substantially.

Meliton B. Juanico is a retired professor of geography at the University of the Philippines Diliman.  He is a licensed environmental planner and is active in consultancy work in urban and regional planning.